By Steve TeskeBen Penn
contributed to this report.
Feb. 4 --The Affordable Care Act will
lead to about 2 million fewer full-time workers by 2017--rising to 2.5 million
by 2024--nearly all from employees voluntarily forgoing work because of the
availability of government-sponsored health insurance exchanges, the
Congressional Budget Office said Feb. 4.
In a report on the nation's budget
and economic outlook, the CBO said the ACA will affect the labor force, mostly
after 2016, when the law's major provisions are fully implemented.
CBO said the ACA will reduce the total number of hours worked by about 1.5
percent to 2 percent from 2017 to 2024, “almost entirely because workers will
choose to supply less labor--given the new taxes and other incentives they
will face and the financial benefits some will receive.”
Most of this
decline will be among lower-wage workers, according to the report.
CBO said its projections of hours worked represent a decline in the number of
full-time-equivalent workers of about 2 million in 2017, rising to about 2.5
million in 2024.
The report said the effects of the ACA on the labor force will be most
evident in some segments of the workforce and “will be small or negligible for
most categories of workers.”
The report added that the reduction in
full-time-equivalent employees “stems almost entirely from a net decline in the
amount of labor that workers choose to supply, rather than from a net drop in
businesses' demand for labor.”
The White House quickly responded to
charges by congressional Republicans that the law is causing employers to
jettison or not create jobs by saying the private sector has added 8.1 million
jobs since the ACA became law in 2010, the strongest level of job growth since
the late 1990s.
“Claims that the Affordable Care Act hurts jobs are
simply belied by the facts in the CBO report,” White House Press Secretary Jay
Carney said in a statement. “CBO's findings are not driven by an assumption
that ACA will lead employers to eliminate jobs or reduce hours, in fact, the
report itself says that there is 'no compelling evidence that part-time
employment has increased as a result of the ACA.' ”
“Over the longer
run, CBO finds that because of this law, individuals will be empowered to make
choices about their own lives and livelihoods, like retiring on time rather
than working into their elderly years or choosing to spend more time with
their families,” Carney said. “At the beginning of this year, we noted that
as part of this new day in health care, Americans would no longer be trapped
in a job just to provide coverage for their families, and would have the
opportunity to pursue their dreams.”
Changes in the workforce linked to
the ACA are a result of “voluntary choices” made by workers, a senior
administration official, who spoke on condition of anonymity, told reporters
in a telephone conference call.
Congressional Republicans said the report is the latest
evidence that the ACA is hurting the economy and should be repealed.
“Obamacare, the President's signature domestic policy achievement, will
lead to more than 2 million fewer jobs and hurt much-needed economic growth,”
Senate Finance Committee ranking member Orrin Hatch (R-Utah) said in a
In response to such views, the Economic Policy Institute
released a statement describing the CBO findings as “unabashedly a good
thing” for working-age adults.
“These are purely voluntary labor supply
decisions, not people being laid off from jobs they'd rather keep, or people
looking for work and being unable to find it,” Elise Gould, director of
health policy research at the Washington-based think tank, said in EPI's
statement. “Working-age adults can now choose, without regard to their need
to secure health insurance, whether they wish to supply labor and how much
labor they wish to supply to the labor market.”
The CBO also found 6 million
individuals are expected to obtain coverage under the ACA in 2014, about 1
million fewer than estimated last spring, because of problems launching the
In addition to lower exchange enrollments, about 1
million fewer people will enroll in Medicaid and the Children's Health
Insurance Program as a result of the ACA, and about 1 million more people
will be uninsured, according to the projections.
The CBO now says about
8 million people will get coverage through Medicaid and CHIP under the ACA in
2014, rather than 9 million.
The report said the lower enrollment
estimates “primarily reflect the significant technical problems that have been
encountered in the initial phases of implementing the ACA.”
But the CBO said ACA enrollment is expected
to increase sharply in 2015 and 2016 as more people respond to new coverage
“Starting in 2017, between 24 million and 25 million people
are expected to obtain coverage each year through exchanges, and roughly 80
percent of those enrollees are expected to receive subsidies for purchasing
that insurance,” the report said.
The CBO also updated its estimates
for the risk corridor program under the ACA, saying such payments from the
federal government to health insurers from 2015 to 2017 would total $8
billion, but corresponding collections from insurers would yield $16 billion,
producing a net savings for the federal government of $8 billion. The CBO in
its May 2013 report said payments and collections would offset each
Some congressional Republicans want to repeal the risk corridor
provision as part of a deal to extend the federal government's borrowing
authority, claiming it is a “bailout” for insurance companies.
will be examined at a hearing by the House Committee on Oversight and
Government Reform scheduled for Feb. 5.
The risk corridors program is
one of three risk adjustment programs created under the ACA to protect
insurers from higher-than-expected costs in covering people with health
problems, which the law bars insurers from discriminating against. Under the
risk corridors program, funds are to be redistributed among insurers in the
individual and small group markets.
To contact the
reporter on this story: Steve Teske in Washington at firstname.lastname@example.org
To contact the editor responsible
for this story: Brian Broderick at email@example.com
Text of the report is available at http://op.bna.com/dlrcases.nsf/r?Open=scrm-9fztsl.
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